Answer:
A. $3,275,000
B. $3,275,000
C. $3,075,000
D. $3,075,000
Explanation:
A. Calculation to determine how much of the judgment is the entity and its owners liable if Sea Green is a SOLE PROPRIETORSHIP,
First step is to calculate the FMV of the net assets
FMV of the net assets=($925,000 - $200,000)
FMV of the net assets =$725,000
Now let calculate the amount the owner is liable of
Amount liable=($10,000,000-$6,000,000)-$725,000
Amount liable= ($4,000,000 - $725,000).
Amount liable=$3,275,000
Therefore the amount of the judgment that the entity and its owners liable if Sea Green is a SOLE PROPRIETORSHIP is $3,275,000
B. Calculation to determine how much of the judgment is the entity and its owners liable if Sea Green is a PARTNERSHIP
First step is to calculate the net FMV of the
net assets
Net FMV of the
net assets =($925,000 - $200,000)
Net FMV of the
net assets= $725,000
Now let calculate the partners are liable of
Amount liable=($10,000,000-$6,000,000)-$725,000
Amount liable= ($4,000,000 - $725,000).
Amount liable=$3,275,000
Therefore the amount of the judgment that the entity and its owners liable if Sea Green is a PARTNERSHIP is $3,275,000
C. Calculation to determine how much of the judgment is the entity and its owners liable if Sea Green is a C corporation
Corporate debts=($10,000,000-$6,000,000)-$925,000
Corporate debts=($4,000,000 - $925,000).
Corporate debts =$3,075,000
Therefore the amount of the judgment that the entity and its owners liable if Sea Green is a C corporation is $3,075,000
D. Calculation to determine how much of the judgment is the entity and its owners liable if Sea Green is a S corporation
Corporate debts=($10,000,000-$6,000,000)-$925,000
Corporate debts=($4,000,000 - $925,000).
Corporate debts =$3,075,000
Therefore the amount of the judgment that the entity and its owners liable if Sea Green is a S corporation is $3,075,000
